wheres this pg mill set to te open pat in ur previous article? will we get a christmas surprise?

Good work Pat.

Yuh know, if all MLA's would leave their egos at the door when they enter politics and work as hard as Pat Bell does for his constituents and never mind the back room bull that goes on in Caucus, we'd have a very strong government that wouldn't have time to B.S. the troops.
They'd be too busy making it work. I know, a fantasy world, but, if only a few would follow Pat's lead............

Well done, Pat! A Very Merry Christmas and A Happy New Year to you and your family!

The numbers put out by Pat Bell are somewhat misleading. Firstly why are we grouping sales to Japan and China. We have been exporting lumber to Japan since the 1960's . In any event here are the hard numbers as they relate to sales in dollars, which gives you a much clearer picture of who your best customers are.

Softwood Lumber Exports to Japan.

October 2010 $82,416,000.00

Year to date $$745,756,000.00

Softwood Lumber Exports the USA

October 2010 $189,629,000.00
Year to date $$2,279,386,000.00

Softwood Lumber Exports to Mainland China

October 2010 $90,321,000.00

Year to date $577,433,000.00

So revenue generated from sales of lumber to Japan year to date exceeded revenue from China by $168,323,000.00

Revenue generated from sales of lumber to the USA year to date exceeded revenue from China by $1,701,953,000.00.

The really interesting thing about these stats are the fact that while our exports to China are almost the same as to the US and Japan in volume, because of the low rates, the Chinese pay for this junk lumber, we get very little revenue in comparison to what we get from Japan and the USA.

As the price of lumber increases, exports to Japan and the USA will increase (its already started) and sales to China will decrease.

As a matter of interest revenue from the sale of logs to China in 2009 was $$30,010,000.00 In 2010 year to date, it was $87,185,000.00 an increase of 190.5%.

The price of lumber on the US Market to-day was $305.00 per 1000 FBM. Can anyone tell me what we are being paid for the lumber being sold to China. How much per 1000 FBM in US dollars. If we dont have that number then we dont know what the hell we are talking about.

Pat Bell is a master of smoke and mirrors, high on hyperbole, but short on actual facts.

Have a nice day.

Palopu,
As the price of lumber increases, exports to Japan and the USA will increase (its already started) and sales to China will decrease????

So China is buying lower quality lumber at a rate lower than the 305 you have quoted. Why would the junk rate go lower if the number u have quoted increases? Wouldn't the correlation between the two rates be close to 1?

I think its a good news story. We are diversifying for our number 1 export. The US is not growth market when compared with India, China, Russia, Brazil, etc. Getting into these markets will help if the US experiences another downturn in its housing market.

As the demand for quality lumber to the USA and Japan increases mills will discontinue producing low cost **mill run** lumber for sales to China, and will begin producing quality lumber for the US/Japanese markets. Therefore US Japanese sales go up. Sales to China goes down.

You are not going to be producing low grade lumber, and selling at a low price to China, when you can make more money selling into the US/Japanese market.

There is a limited amount of lumber to be sold from Canada (BC) in a given year to world markets. Russia, and Brazil are actually our competitors, along with the Western and Southern US States. Plus Finland, and the Scandinavian Countries.

We have a limited amount of timber we can harvest every year, and that amount will diminish in the years to come due to the beetle kill, so we will be producing lumber and selling to he highest markets we can get.

At this point in time China does very little building with lumber, and most of what we export to them is used as concrete forms. We get diddly squat for this lumber and as soon as markets turn around we will drop them like a hot potato.

where is this p.g mill that was set to re open? was just fluff? politics?

Hey Hoodrich;
Methinks you hit the nail on the head.

sawmills dont try to make low quality lumber. they always try to make the highest quality because that is where the largest margins are. they will let the high quality sit until it sells.
china has a gdp growth rate in double digits. this would mean demand for the form grade lumber should only increase and perhaps they will begin to use lumber in other parts of construction.
we will have plenty of low grade lumber as a result of the mountain pine beetle.
Again this is good news story. No other way to look at it.

Excellent analysis Palopu.

We are selling/moving product, and probably at 25c a meter stumpage because right now there are no other markets.

I too would like to see the figures that allow us to compare apples to apples and oranges to oranges. Beware any politician who changes the terms of reference, as its usually only to engage in the smoke and mirrors that they excel at.

Finally, google chinese ghost cities. From Time Magazine, http://www.time.com/time/photogallery/0,29307,1975397,00.html. China is on the cusp of a reckoning that will make the American recession look like a cakewalk.

So, don't get our hopes up with China quite yet.

Hood. The Canfor Mill that re-opened in Quesnel ships all its production to China. All they produce at this time is utility grade lumber.

So of course they are producing low grade lumber. In fact they converted the mill to metric just for the Chinese. I have seen some of the lumber being shipped and I can tell you it is not very good.

In any event I agree that its good news that the mills are working, even if the profit margin is slim. Its better than the alternative.

Sales are down from the USA so far since their resession, it is not fair or honest to compare them with China. If the USA ever gets back to the amount they were buying, it would dwarf anything China buys. This is not such a big 'good news' story as Liberals would have us believe. When good news is announced; beware of the messenger.

I don't think we are actually getting any money for this lumber, as we owe China much more than we can presently repay.

Who is we?

Facts are the US Federal Reserve is printing dollars as fast as they can right now and selling them to the Chinese. The Chinese would rather horde commodities, than depreciating US dollars. Buying lumber on the cheep and hording it for its future value is a superior investment to buying more US dollars at this point, and this is what is driving lumber sales (as well as all other commodities) to China more than anything else. Pat Bell just happens to be an opportunist in the right place at the right time with the right kind of manipulation of statistics.

If China-Japan are buying 88% of the lumber, and yet only producing 16% more revenue with 730% more product... then the Americans are paying more than six times as much for lumber as China-Japan... but we know Japan is paying more than the Americans and so if one was to take theirs out then China is paying very little for the volume they receive... maybe $30 a thousand board feet?

Factor in that if North Korea gets out of line all sales to China will be gone, because trade will stop with a belligerent China. The Americans would love nothing more than an excuse to cancel their debt to China to absorb the dollars they've been monetizing. All they need is a well timed military exercise near the North Korea boarder. That's when the Chines house of cards falls.

Good news for the short term, but hardly the savior in the long run.

Palopu

It would be nice if you would start to learn to provide the source of your information. Without that, the data is meaningless.

Here is my source http://www.bcstats.gov.bc.ca/data/bus_stat/busind/trade/SWL.xls

Go to tab 4 of the spreadsheet to read “BC Exports of Softwood Lumber (440710) by Destination”.

The info is divided into 15 client regions and deals with BC shipments only.
There are figures therefore $value, plus volume in cubic metres. One can calculate the average value per cubic metre shipped from that information.

I have done so and get the following info for the month of October, 2010
Sorted by total dollar value
1 USA $124,043,682
2 Mainland China $82,496,803
3 Japan $58,693,073
4 Western Europe $15,364,875
5 South East Asia $7,339,628
6 Taiwan $5,589,898
7 South Korea $3,271,040
8 Middle East $3,246,987
9 Hong Kong $2,471,835
10 India $352,431
11 South America $229,066
12 Mexico $113,872
13 Eastern Europe $110,543
14 Central America $98,749
15 Africa $64,094

Sorted by total volume in cubic metres
1 USA 890,001
2 Mainland China 553,706
3 Japan 212,308
4 Taiwan 34,253
5 Western Europe 25,792
6 South East Asia 25,786
7 Middle East 22,325
8 South Korea 14,298
9 Hong Kong 13,040
10 India 1,506
11 South America 1,186
12 Mexico 177
13 Central America 158
14 Eastern Europe 104
15 Africa 87

Sorted by revenue per cubic metre
1 Eastern Europe $1,062.91
2 Africa $736.71
3 Mexico $643.34
4 Central America $624.99
5 Western Europe $595.72
6 South East Asia $284.64
7 Japan $276.45
8 India $234.02
9 South Korea $228.78
10 South America $193.14
11 Hong Kong $189.56
12 Taiwan $163.19
13 Mainland China $148.99
14 Middle East $145.44
15 USA $139.37

Total Shipments in October 2010
$303,486,576 1,794,727 $169.10

Shipments to USA
$124,043,682 890,001 $139.37
40.9% of total shipments

Shipments to other clients
$179,442,894 904,726 $198.34
59.1% of total shipments

Shipments to China + Japan
$141,189,876 766,014 $184.32
46.5% of total shipments

So, who has the smoke and mirrors? Pat, me, you, the stats you are using, the stats from statsBC, ?

Unless you can provide a reliable source for your information, perhaps an apology is in order.

So all this low cost lumber to China..... BS from the looks of it ....

USA shipments = $139.27/m3
China = $148.99/m3

Fact is, the USA is building with match sticks the same as us.

Another factoid ....

The stats table shows monthly shipments since January 1988.

The highest m3 percentage of all BC shipments going to the USA was in July 2005 with 91% of shipments. The price per m3 was $162 at that time.

We sent an abnormally low shipment to China in that particular month, so I will use the figures on either side of the month. China shipments were less than 1% of total shipments. However, the unit price was in the $240/m3 range

In July of 2010 the USA shipments dropped to 65% with a dollar value of $139.76/m3
.

The China story can be read above.

----------------------------------------
BTW 1m3 = 423.7 board feet.

Thus $139.76/m3 = $329.86/MFBM

"The Canfor Mill that re-opened in Quesnel ships all its production to China. All they produce at this time is utility grade lumber."

How many m3 have they shipped in the last 12 months? Is that mill representative of the mills producing for China?

I mean, let's get real here about stats and facts. Produce some, provide the source, and we're in business. Until you do, everything you say is pure conjecture based on smoke and mirrors.

So far, over the last 12 months, the shipments to China have been 3,823,735m3 (BTW, I am continuing to use the same source data I quoted above)

An interesting persepctive over the last 3 years.

Change in shipment to USA and China

Year, Month, Total Volume (m3) shipped, % to USA, % to China

2008 January 1,468,334 77.2% 2.4%
2008 February 1,736,377 77.0% 3.8%
2008 March 1,929,436 79.5% 3.7%
2008 April 2,145,514 76.5% 5.0%
2008 May 1,981,231 72.3% 6.3%
2008 June 1,891,291 72.5% 6.3%
2008 July 1,806,086 75.3% 3.5%
2008 August 1,724,302 75.3% 2.2%
2008 September 1,755,723 75.8% 6.9%
2008 October 1,731,458 70.8% 7.4%
2008 November 1,658,038 73.2% 8.6%
2008 December 1,379,534 69.0% 10.3%
2009 January 1,119,638 76.0% 3.5%
2009 February 1,281,526 71.3% 11.3%
2009 March 1,417,411 66.2% 12.9%
2009 April 1,392,309 69.0% 16.3%
2009 May 1,654,454 62.2% 11.4%
2009 June 1,526,893 68.5% 15.6%
2009 July 1,524,233 66.2% 14.7%
2009 August 1,659,559 68.7% 14.8%
2009 September 1,600,632 65.6% 14.6%
2009 October 1,556,858 67.0% 13.5%
2009 November 1,517,037 62.2% 17.2%
2009 December 1,571,169 59.5% 19.9%
2010 January 1,369,681 65.9% 13.4%
2010 February 1,625,296 65.2% 16.9%
2010 March 1,772,183 64.7% 16.0%
2010 April 1,791,447 65.1% 15.3%
2010 May 1,760,128 62.7% 15.9%
2010 June 2,005,477 67.1% 14.5%
2010 July 1,746,078 65.0% 15.6%
2010 August 1,663,474 56.8% 24.0%
2010 September 1,676,792 51.7% 26.1%
2010 October 1,803,064 49.4% 30.7%

Message to the USA .... ?

We don't sit idly by while you leave a trading partner in the lurch. So much for not only a long term trading partner, but also the longest undefended border in the world.

Sorry guys. We have to look out for ourselves.

Not a nice message. The truth usualy hurts.

As you said supertech :"IF the USA ever gets back to the amount they were buying"

I would say we cannot again put all our eggs in one basket. Like any other good quality producer, create the product to the needs of the customer. Diversify your market. Look at the price we can get for some of our "softwood". Increase that. Sell better quality to more countries like Japan. Look, we are seeing a larger market for pellets. Low cost plants compared to sawmills. Maybe we need to create more "waste" from the marginal lumber to redirect it to pellets.

Whatever it is, who is actually co-ordinating efforts like that. I know, I know, the marketplace will straighten it all out.

Gus. The BC Lumber Comanies have been selling lumber to the USA, Japan, China, and other Countries for over 60/70 years. They do not need any advice from the likes of Pat Bell, or yourselve on how to sell their products. They have plenty of high priced help, and sales offices all over the world to look after their interests.

As I said in another post, my statistics come from BC Stats the same as yours, so it is a question of interpretation as to what is happening with sales to China. I suggest that you look at the info I provided in the other post and you might be somewhat enlightened.

Insofar as Pat goes, here is a quote from Indira Gandhi that I think is apropos.

**There are two kinds of people. Those who do the work, and those who take the credit. Try to be in the first group: there is less competition there.***